TaxTMI 
TaxTMI 
2019 (12) TMI 290
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....arton. It has not permitted the defendant to use the said label and carton for carrying on the defendant's business of manufacture and sale of hair oil. By manufacturing and marketing/selling its hair oil using the said label and carton, the defendant is infringing the plaintiff's copyright in the said label and carton. 2. The undisputed facts of the case are that, at all material times, the Sharma Brothers carried on the family business of manufacture and sale of Ayurvedic hair oil under the name of 'BANPHOOL'. This business was carried on in co-partnership, pursuant to a partnership deed executed in 1982 by and between the Sharma Brothers. The name of the partnership was M/s Sharma Chemical Works. The copyright in respect of the artistic work on the said label and carton was registered in the name of the partnership firm. The registration number for the label was A42227/83 and that for the carton was A41272/83. In the registration certificate, in respect of the label, the name of the author of the artistic work 'BANPHOOL' was shown as Shri Biswanath Sharma, partner of Sharma Chemical Works. The registration certificate in respect of the carton showed the name of the author of ....
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....the CLB would value the Units separately as also the share value of the entire company so that the group whose share value was more than the Unit that went to them, could be compensated in proportion to the value of the shares held by that group. The value of the shares of the company was to be determined on the basis of the Balance Sheet as on 30.09.2008. (iii) The respondents' group (Biswanath Group) shall surrender their shares in the company for cancellation so that the petitioners' group (Saraswati Group) could retain the company for parting with the Delhi and Baddi units. (iv) The petitioners' group (Saraswati Group) shall not use the portrait or monogram of the respondent no. 2 (Biswanath Sharma) on any of their products. (v) The respondent no.2 (Biswanath Group) was directed to float a separate company to carry on the business that they had been already carrying on through the company (plaintiff). (vi) The respondents' group would be at liberty to pursue their business through the Delhi and Baddi units. (vii) The Biswanath Group would not use name of the respondent no.1 company (plaintiff herein) but would be at liberty to float ....
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....on of the Bombay High Court in N.T. Raghunathan & Anr. - vs. - All India Reporter Ltd. AIR 1971 (Bombay) 48, it was submitted that the defendant has not only copied the ideas of the plaintiff but also the expression of ideas and the form in which they were expressed and this amounts to infringement of copyright. 8. Learned Senior Counsel referred to Clause VIII of the Memorandum of Association of the plaintiff company which states that all the assets of the partnership (Sharma Chemical Works) including the assets mentioned in Schedule 'A' to the Memorandum shall vest in the company on its incorporation free from all claims by the parties to the Memorandum. My attention was drawn to the said Schedule 'A' which includes the copyrights in respect of the label and carton in question. 9. It is was further submitted on behalf of the plaintiff that the defendant is carrying on manufacturing activities by wrongfully using the trade license issued in the name of the plaintiff company. My attention was drawn to a letter dated 07 October, 2011 written on behalf of the plaintiff to the Directorate of I.S.M. & H., Government of India complaining of the same. 10. It was then submitted t....
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....ling with it the previous part, the same must be rejected. 14. Appearing for the defendant, Learned Senior Counsel submitted that the order dated 14th September, 2011 passed by the CLB disposing of the application under Sections 397/398 of the Companies Act, 1956 filed by the Saraswati Group, expressly permitted the Biswanath Group to float a new company, name the same by adding a prefix or suffix to the name 'Sharma Ayurved' and carry on the same business that was being carried on by the plaintiff company. He submitted that the CLB came to the clear conclusion that it was Biswanath Sharma who developed and expanded the family business of manufacture and sale of 'Banphool hair oil'. It was he and his group who were being oppressed by the other group so it would not be proper to direct the Biswanath Group to sell their shares in the plaintiff company to the other group just because the Biswanath Group was a minority. Hence, the CLB divided the properties of the company between the two groups. The Kolkata unit was given to the Saraswati Group. The Delhi and Baddi Units were given to the Biswanath Group with liberty to promote a new company and carry on the same business through su....
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....e decision of the Hon'ble Supreme Court in the case of Balwant Rai Saluja & Anr. - vs. - Air India Ltd. & Ors. (2014) 9 SCC 407, where the Apex Court approved lifting of the corporate veil when the company in question was being used as a facade for deception at the time of the relevant transaction. 17. The other submission of Learned Senior Counsel for the defendant was that the present application should be dismissed in limine on the ground of suppression of material facts as also forum shopping. Learned Counsel drew my attention to an application filed by the Saraswati Group which is admittedly in control and management of the plaintiff before the CLB being CA No.270 of 2012 in CP No.49 of 2008, under Section 634A of the Companies Act, 1956 wherein prayers 'f' and 'i' were as follows: "f) The respondents and/or their assigns, men, agents and servants and all those acting on their behalf be directed not to use the mark 'BANPHOOL' and the carton in the manner as described and/or shown in Annexure 'I' and 'J' hereinabove; i) The respondents and/or their assigns, men, agents and servants and all those acting on their behalf be restrained from using packaging as s....
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....e attractive. However, the facts of the case warrant a deeper look into the matter. 21. It is not in dispute that the Sharma brothers carried on the business of manufacture and sale of Ayurvedic hair oil under the name 'BANPHOOL' in co-partnership through a duly constituted partnership firm called M/s Sharma Chemical Works. The copyrights in the artistic work on the label and carton in question were registered in the name of the partnership firm. Biswanath was shown as the author of the artistic work 'BANPHOOL' in the registration certificate. The plaintiff company was incorporated by the members of the Sharma family with the object of carrying on the same business through a private limited company. The business, assets, liabilities of the partnership firm vested in the plaintiff company. The members of the Sharma family including Biswanath were the subscribers to the Memorandum of Association of the plaintiff. In other words, they were the promoters of the plaintiff company. 22. Disputes and differences arose between two groups of the Sharma family. The Saraswati Group filed a company petition under Sections 397/398 of the Companies Act, 1956 before the CLB. Such company pet....
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....he Kolkata unit of the plaintiff company. The Biswanath Group was given the Delhi and Baddi units. Biswanath Group was directed to float a separate company adding prefix or suffix to the corporate name used by the plaintiff company and was given the liberty to carry on the same business that they had been carrying on through the plaintiff company. It is important to note that neither of the groups challenged the aforesaid CLB order before a higher forum. 26. In the aforesaid factual matrix, it is clear that the rights and obligations of the two groups vis-a-vis each other in relation to the family business of manufacture and sale of 'Banphool hair oil' crystallized in the CLB order. The Saraswati Group was given exclusive control of the plaintiff company and the right to carry on the family business at the Kolkata unit through the instrumentality of the plaintiff company. The Biswanath Group was granted liberty to carry on the same family business through a newly floated private limited company at the Delhi and Baddi units. There was thus, an equitable division of the business and assets of the plaintiff company between the two groups. 27. In the aforesaid factual backdrop, I....